The recently announced delay to the Future Pensions Act coming into force in the Netherlands is “unfortunate” but “expected”, Pension Federation chairman, Ger Jaarsma has said.

Last week, the Deputy Prime Minister and Minister for Poverty Policy, Participation and Pensions, Carola Schouten, revealed that the act has been delayed from 1 January 2023 to 1 July 2023.

Jaarsma noted that while it was “of course unfortunate” that there was another postponement, it was good that clarity has been provided.

“It is important that sufficient time is left for implementation of the legislation,” commented Jaarsma. “That is now four years away, and social partners and pension funds need that time.

“There are pension funds that want to switch to the new system as of 1 January 2024. This would still be possible for some if the legislative process is completed in the first quarter of 2023.”

The Pension Federation also pointed to other parts of Schouten’s announcement, relating to the ongoing temporary exemption of pension funds having to reduce their pensions at a funding ratio of below 104 per cent, with the temporary level of funding for pension reduction being 90 per cent.

Schouten acknowledged that there were special circumstances ongoing, but that it was unclear whether these would lead to a large number of pension funds having to reduce their pensions.

The minister stated that she will see whether this was still the case at the end of the year.

The temporary arrangement, which stipulates that pension funds may already index at a funding ratio of at least 105 per cent, will expire on 1 January 2023.

The Pension Federation stated that this concerns pension funds that want to switch to the new system.

“If pension funds take the decision to index in 2022, this indexation order in council still offers the option of granting indexation in 2023,” it said.

“As soon as the Future Pensions Act has been passed, pension funds can use the transition ftk. When the transition ftk actually takes effect on 1 July 2023, the lack of relaxed rules in the period January 2023 – July 2023 would therefore have no effect on indexation decisions by pension funds.”

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